Textile processing mills decide to suspend operations

RECORDER REPORT

KARACHI: Textile processing mills on Monday decided to suspend operations against imposition of sales tax.

Arif Lakhani, Regional Chairman All Pakistan Textile Mills Processing Association, told Business Recorder that in a general meeting held on Monday, all association members have unanimously decided to suspend operations of textile processing mills across the country as customers are not agreed to pay new rates, fixed by processing mills after the imposition of sales tax.

He stated that with the imposition of some 17 percent sales tax on filers and 20 percent on non-filers, the cost of processing mills has increased by some 40 percent.

“The massive increase in cost of production is not acceptable as customers are not placing new orders at new rates with effect from July 1, 2019. Therefore, in order to avoid losses processing mills have decided to suspend operations till the resolution of issue,” he added.

Lakhani said that only export-related processing mills are operational in the larger interest of the country to fulfill the commitment of export orders.

He said that Pakistan’s textile industry is facing history’s worst situation due to economic uncertainty. “Although billions of rupees refunds of textile mills are already pending with government, the government has imposed new taxes on the ailing textile industry of the country,” he added.

Regional Chairman said that with the closer of work in 700 textile processing mills, some 0.8 million textile workers will lose their jobs, he mentioned.

He said that in the current situation textile exporters are also worried and reluctant to get new orders due to uncertain cost of production. Lakhani has urged Prime Minister Imran Khan for removal of sales tax on textile sector to resume the operation of the mills.